Invest in the future, not the past: 4 reasons to divest from fossil fuels

By rob hopkins 28th November 2016

A guest blog from Transition Network Trustee Tony Greenham, published at the RSA blog: With the benefit of hindsight, would you have wanted your pension being invested in cassette tapes, floppy discs, fax machines, Kodak or Blockbuster in 2000? Well what do you think your future self will make of your current investment in fossil fuels? Against the backdrop of the 22nd UN Climate Change summit in Marrakech (COP22), and yesterday’s news that 2016 will once again be the hottest year on record, it is worth reflecting on four reasons for all of us to take action on reducing investment in carbon intensive energy.

We have to leave carbon in the ground

Companies continue to invest huge amounts of cash into finding and exploiting yet more fossil fuels even though the most advanced scientific knowledge tells us we could never burn it all without causing catastrophic climate change. This risks widespread loss of life and livelihoods, especially amongst the world’s poorest and most vulnerable communities.

If we are to give ourselves a 50:50 chance of keeping global warming to 1.5degrees, as agreed at the Paris Climate Change summit last year, we can carry on burning fossil fuel at our current rate for only 10 more years.

To add to the momentum away from fossil fuel investments, a recent legal opinion about the fiduciary duties of charity trustees concluded that investment in carbon intensive industries is irreconcilable with many charitable objectives, including those relating to environment, poverty and health.

If you are a trustee of a charity that has investment funds, are you really comfortable that it is appropriate to put your charity’s money into activities that cause serious harm to humanity?

Finance and government is heading the wrong way

Too many UK financial institutions are still investing on auto-pilot in obsolete carbon technologies, and paying too little attention to the green finance revolution. Meanwhile, China is mobilising huge investment in clean technologies and withdrawing finance from polluting companies and industries. The momentum is in the East.

The deep pool of financial expertise in London must be redirected to becoming a global hub for green finance. This is the only sensible long-term path.

So what should you do about it?

As we have previously argued at the RSA, divesting from fossil fuel companies sends a vital signal to corporations, financiers and politicians that investment in further exploration and production of oil, gas and coal is simply not socially acceptable.

At this point, I am obliged to point out that I am not authorised to give investment advice, and anything written here should not be taken as such.

So what am I suggesting?

The message is this: ask questions.

If you are lucky enough to have a pension fund then write to the fund manager and ask them how much is invested in fossil fuels. Demand an explanation of why they consider this to be a suitable long-term investment for providing for your retirement when the Paris Climate Change Agreement requires that they be phased out, and rapid advances in renewable technology are rendering them obsolete.

If your employer provides your pension then ask the same questions of them.

If you are a charity trustee, or responsible for investing money for the long-term benefit of others, demand answers from your investment advisers. If you are not happy with them, find new advisers.

The future of energy is green, and it is within sight. Be part of the future, not the past.